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*Ah, just picked up your reply now Patrick. Yep, will probably have to speak to someone I can trust, but folks around here also seem to know a thing or two - and it's gratifying to know there are/were others in a similar situation.

THANKS for your thoughtful response gcr - your points are all very fair and valid. I guess a financial advisor would be my next stop, but I know there are some pretty astute forumites here who I'm sure would be able to provide some direction as well with level-headed, common sense advise - based, of course, on my particuar circumstances, which I'll detail below. Right now I'm going in circles with conflicting thoughts, which of course only increases my anxiety (beer helps though). Obviously any advise will be treated as just that; I realise that all paths carry risks, especially in these markets. Ok here's my situation.. I know people will scoff at my tight budget but Mr Dividend's earlier post has provided some encouragement!

I'm 46, unemployed, live alone and lead a frugal lifestyle, but probably not frugal enough. I'm debt free, own my home & an investment property which brings in a rent of R5700pm. My expenses come to R13 200 (no medical aid etc), leaving a shortfall of R7 500. I have savings of R1 200 000 & that's it. It's sitting mostly in my broker's account earning piddly interest until it's told where to go, but it includes positions in Satrix SWX (50G); Coreshares Div Aristocrats (130G); Discovery (75G) & Balwin (25G).

I know that any advise will be accompanied by cold hard figures that will be discouraging but I'm inspired by folks like Mr Dividend who's been able to make ends meet by building a dividend portfolio. Seems that this is my best option? The alternative is to bank, say, 4 years expenses to account for market volatility, which will allow a wider scope of investment - ETFs like the Indi25 but particularly international ETFs like the dbx trackers, and perhaps an asset manager like 36One to manage the rest?

Extra income - when my tenant's lease expires in 5 months I'll move there and rent out my current home which should bring in an extra 2000. The investment property's yielding 6% after expenses (based on worth of about R620 000) and will probably sell it, especially if things go horribly wrong. I'd get more for my current home but would hate to let it go. And my boet may be able to pay me 2000 pm in the new year to help him out a bit - so that R7 500 shortfall will be reduced by 2 to 4 grand.

So that's my life as it stands. Decisions, decisions. Again, any broad, or detailed advice based on these figures would be most appreciated!

Dont know how relevant my contribution will be as I'm still slaving away all day, hopefully FI by my late 40's with one of those russian brides.

Have to agree with REIT's as they pay decent dividends and you wont have the hassle of fixing small problems on your property or dealing with late payers. Also REIT's like Growthpoint can offer good hedge value, seeing as they own a portion in Growthpoint Australia.

Try this website its american but some princples stay the same,  http://www.dividendmantra.com/

As far as I understand only ETFs are allowed in TFSAs. So what you can do is buy into the PTXTEN or the PTXSPY. Both those ETFs are only invested in REITs but their dividend yields are not much to write home about.

Living off dividends is not as tax efficient as living off the occasional sale of high growth stocks. Patrick with his clever calculator has proven it on this thread already.
For the next 4 months you pay 15% withholding tax on divies. Thereafter it could be 25% putting it in line with the rest of the western world.
Normal tax on Capital Gains would be under 13% but very likely closer to zero.

Our living standards differ but if I were in Ron's shoes, I would pay off any debt asap then sell both properties. This would give him R2,7m in cash. Owning primary property is not an investment but a standard of living expense.

With R2,7m invested in no more than 2 ETF's, you could live very comfortably. The 4% rule is in my view a figure applicable to investments in cash and bonds or for people living in emerged market countries. I would raise that figure to 7% for emerging markets with no holdings in cash and bonds.

I have been retired for close on 2 years and despite the expense of setting up a new home in a different country plus 1 flat market year, my portfolio has grown by R400k.
Ron is alone and I have a wife and we both have private medical insurance.

Thanks for the vote of confidence. And Mr_D was right. You should definitely also look into international REITs or REITs with international exposure. My personal favourite is RPL. They payout their dividends in GBP so as they steadily increase their dividend payout it is compounded be the Rand's steady decline against the Pound.

Must give you a word of caution though. Be sure to look at a REIT's balance sheet before you invest. I have looked at pretty much every single REIT listed on the JSE and the majority of them have more liabilities than they have assets. So they pay out great dividends but they are seriously in debt. They have more debt than they should be having. And considering, as an investor, that you are an owner in the company that debt becomes your debt. This is just my personal preference, but I avoid investing in companies who are in the red on their balance sheets like I avoid shaving more than once a week. I hate debt and that is why I don't have any in my life. I understand that companies will always have debt and there is no avoiding it but I expect them to keep it under control and live within their means. A company with so much debt indicates poor management to me. Especially when they continue to payout high dividends while finding themselves in such a situation.

That is why I am invested in TEX and RPL. They have their balance sheets under control. Or at least they did the last time they released their financial statements. RPL will be releasing their full year results tomorrow so we will see if I still like them then.

Best of luck to you and I hope you get this sorted.

Sorry Fawkes, the enquiry was directed at Orca; he mentioned 2 ETFs but perhaps just making a broad point. Would be interesting to hear recommendations though. By the way my figures presume I get the asking price of my property, who knows may be too optimistic once agent's taken their cut (add to long list of disadvantages to REITs). Oh, and hold onto my part-time job, but can't be too pessimistic. Pretty tight though, gotta admit.

@Ron. The favorite ETF's on this forum are STXIND and DIVTRX. (so far that I see).
The STXIND has the top 25 Co's and weighted by market capitalization.
The DIVTRX has about the same number of Co's but the management chooses Co's that keep increasing their dividends.
Co's that keep increasing their dividends are normally the ones that are growing from strength to strength and have good fundamentals and management.
I will post some charts here for comparison. Although my favorite one is DIVTRX, it is only a year and a half old and STXIND is skewed by the developments with SAB that has a heavy weighting in it.